Jan rate up from 6% in Oct, down from 7.5% on-year
Unemployment in the Philippines as of January has worsened since a quarter earlier, despite the creation of more than a million new jobs since a year ago, preliminary results of the Labor Force Survey (LFS) released on Thursday by the Philippine Statistics Authority (PSA) showed.
The unemployment rate accelerated to 6.6 percent in January 2015 from 6 percent in October 2014, although it eased from 7.5 percent in January 2014, according to the LFS figures.
Highlighting the year-on-year decline in unemployment, the National Economic and Development Authority (NEDA) said the January outcome shows signs that the country’s labor market is continuously improving, with the number of jobless Filipinos down by 334,000 to 2.6 million during the period in review.
However, the latest LFS data did not reflect the employment situation in the whole country as the survey still excluded Region VIII, which had been hit by a strong typhoon, in order to be comparable with the labor and employment data released by the PSA in the January 2014 LFS round.
“The region suffered from devastation by typhoon Yolanda causing labor displacement and thus no survey was conducted in the area last year. An alternative estimate which excludes Leyte only, rather than the whole Region 8, in the January 2015 LFS round shows little effect on the estimate of the national unemployment rate,” NEDA explained.
1.04M jobs created
The survey, using the available employment data, showed a moderate improvement year-on-year in January employment to 93.4 percent from 92.5 percent, representing 2.8 percent growth in the number of employed Filipinos from 36.4 million in the January 2014 LFS to 37.5 million in the latest survey round.
NEDA pointed out that the number of additional Filipinos employed from January 2014 to January 2015 at 1.04 million was almost four times the 281,000 jobs generated in the comparative year.
“The labor market got a boost from stronger growth in all sectors, mainly driven by services, which grew by 3.9 percent, contributing a 766,000 net employment gain in January 2015,” Economic Planning Secretary and NEDA director-general Arsenio Balisacan explained.
The improvement in the employment rate helped push down the underemployment rate — the percentage of the underemployed to the total number of workers — to 17.5 percent from 19.5 percent in the year-on-year period in review.
The underemployment rate in January slipped to 17.5 percent from 19.5 percent a year earlier, translating to a reduction in the number of underemployed workers to 6.5 million in January 2015 from about 7.1 million a year earlier.
January’s underemployment rate was also lower than the 18.7 percent rate recorded in October.
“For this period, the number of underemployed persons contracted among wage and salary workers, as well as self-employed workers, which possibly means greater availability of more remunerative jobs and more profitable ventures,” Balisacan said.
Focus on low-income sectors
Alvin Ang, economist at the University of Santo Tomas, said that the labor data in January reflects an improved investment climate in the country.
He said the country’s strong external position reflected by robust overseas Filipino remittances and record-high foreign direct investments could have encouraged businesses in the country to invest more and create jobs for Filipinos.
Ang added that a key indicator of an improved labor market is the continuing decline in the underemployment rate.
He said the country should be able to produce more quality jobs not just for the general economy but also for the low-income sectors to ease the number of underemployed Filipinos.
“The challenge is sustainable creation of jobs, not just in the general economy but with very specific sectors like agri and other low income sectors,” he said.
Caution on food prices
For its part, NEDA stressed the importance of ensuring that the gains in employment and income are not eroded by high food prices.
“The recent report on poverty highlighted the impacts of high food prices, mostly on low-income families. Our significant strides in poverty reduction through better quality jobs and higher incomes must move forward along with cheaper food prices. Elevated rice prices are of particular concern, as rice takes up about 20 percent of the budget of the poor,” said Balisacan.